Steven Consumes Only Two Goods, Both of Which Are Normal

question 315

Essay

Steven consumes only two goods, both of which are normal goods.He is maximizing his utility in consumption of both goods.Now assume the price of one of the goods increases.How should Steven's consumption change?
A.Steven should consume more of the good whose price rose and less of the good whose price did not change.
B.Steven should consume more of both goods.
C.Steven should consume less of the good whose price rose and more of the good whose price did not change.
D.Steven should consume less of both goods.

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Definitions:

Mainstream Economics

The body of economic thought and theories that are widely accepted and taught across major universities and employed in policy-making by most governments.

Supply Of Labor

The total hours that workers or laborers are willing and able to work at given wage rates in a specified time period.

Monopolies Control

Regulatory measures and policies implemented to prevent or break down monopolistic structures in markets to ensure fair competition.

Labor Problem

Refers to disputes or disagreements between employers and employees regarding work conditions, wages, hours, and other employment terms.